As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of China Yuchai International Limited (NYSE:CYD), it is a financially-robust company with a buoyant future outlook, not yet factored into the price. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, read the full report on China Yuchai International here.
Flawless balance sheet established dividend payer
CYD's share price is trading below its true value according to its price-to-earnings ratio of 5.88x compared to its industry as well as the wider stock market, which means it is relatively cheaper than its peers.
CYD's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. CYD's has produced operating cash levels of 0.33x total debt over the past year, which implies that CYD's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For China Yuchai International, I've put together three relevant aspects you should further examine:
- Historical Performance: What has CYD's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Dividend Income vs Capital Gains: Does CYD return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from CYD as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CYD? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.